Formanul Islam, outmoded Govt Director and CEO of Bangladesh Infrastructure Finance Fund Tiny (BIFFL) issued a rejoinder to a TBS document titled “How a command-funded PPP lender wasted public cash in harmful investments” printed on 1 October 2024.
Following are the factors raised within the rejoinder and our acknowledge.
“Alternatively, the company wasted its funds by investing in Mounted Deposit Receipts (FDRs) with feeble banks and financial institutions. It additionally offered loans to a pair corporations unrelated to PPPs which went defaulted inflicting loss of public cash of nearly Tk1,800 crore.”
Formanul’s teach: FDR is no longer any longer an funding. By very definition, it is a long way a deposit. Not a single taka has yet been lost. No bank or NBFI has denied the existence of FDRs and most comprise repaid critical and interest. Pastime is additionally accruing on all FDRs. The reporter must silent comprise reported how great of FDR and interest thereon has been recovered since July 2019. BIFFL is a fleshy-fledged financial institution. It does no longer revel in any exemption through funding i.e. single borrower publicity limit, sector-particular investments, green financing, poverty alleviation financing etc. Your total loans had been made as per provisions of BIFFL’s Credit Policy and with due approval from the Credit Committee of the Board and the Board of Directors itself. Even when every figures produced in two tables of the document are set collectively, this is perchance no longer 1,800 crore. Here is nothing nevertheless an intentional blunder.
Our acknowledge: FDR is additionally an funding, this is the rationale any bank and NBFI makes financial prognosis about the return and security of the cash before placing deposits with a bunch of financial institutions. If FDR turns overdue, investor banks or NBFIs have to withhold provisions against it and reduction interests suspended.
In the case of BIFFL, it needed to withhold a Tk300 crore provision against overdue FDR of Tk650 crore and one more Tk300 crore provision maintained against default loans of Tk500 crore, inflicting a complete financial loss of nearly Tk1,800 crore for the company, in accordance to company assertion as of August 2024. All those investments had been made all the diagram through 2015 and 2019 when Formanul Islam changed into CEO of the company.
The authorities in 2011 formed Bangladesh Infrastructure Finance Fund Tiny (BIFFL), a obvious non-bank financial institution, to bolster financing in public-deepest partnership (PPP) projects.
Alternatively, the company wasted its funds by investing in Mounted Deposit Receipts (FDRs) with feeble banks and financial institutions. It additionally offered loans to a pair corporations unrelated to PPPs.
“The finance ministry formed BIFFL, the biggest non-bank financial institution through paid-up capital, by allocating Tk1,600 crore. Of this, Tk650 crore changed into invested in mounted deposits with 13 poorly performing banks and NBFIs, that are in actuality unable to repay the funds.”
Formanul’s teach: Here’s a fraudulent and misleading allegation. At some level of my tenure, the fairness of BIFFL stood at Tk2,300 crore and each approved and paid-up capital had been raised to Tk10,000 crore and Tk2,100 crore respectively, with approval of the Board and permission from RJSC.
It changed into no longer Tk650 crore. Rather an quantity of about Tk1,900 crore changed into deposited in a lot of banks and NBFIs. Out of that FDRs price Tk350 crore changed into historic as CRR and SLR requirement of Bangladesh Bank against the loans disbursed, which increased gradually as BIFFL prolonged extra loans over time. The relaxation of the cash changed into invested in gargantuan infrastructure projects.
It is additionally no longer correct that 13 poorly performing banks and NBFIs are unable to repay the funds. Please bag data from them on how great they’ve already paid as critical and interest on FDRs.
Our acknowledge: BIFFL had mounted deposits of Tk1,986 with 13 banks in 2014, of which 80% had been with command banks. Alternatively, those FDRs had been unfold to 30 banks and NBFIs in 2015 soon after Formanul joined as the executive director and CEO, in accordance to annual experiences of BIFFL.
In 2017, total deposits had been diverted to 51 deepest banks and NBFIs, withdrawing from command banks violating the finance ministry’s regulation. Of the 51 banks and NBFIs, 13 had been poorly performing and now Tk650 crore is overdue, in accordance to BIFFL’s most up-to-date assertion. The annual document of 2023 additionally printed the record of banks and NBFIs where interest accumulated against FDR suspended.
BIFFL changed into established with preliminary paid-up capital of Tk1,600 crore in 2011 which later increased to Tk2,300 crore.
“Besides, loans of Tk500 crore lent to 12 corporations alongside side nine auto brick projects comprise change into defaulted.”
Formanul’s teach: Here is yet again a biased assertion. Before all the pieces, no longer all of those loans had been given all the diagram through my tenure. 2nd, funds historic to finance Green Brick projects had been sourced from a refinancing procedure of Bangladesh Bank funded by ADB. The Green Brick projects are struggling because of put up-COVID-19 considerations. Reportedly, the borrower did no longer receive any cooperation or make stronger from BIFFL all the diagram through or put up-Covid disaster, making the projects sick.
Our acknowledge: The authorities established BIFFL as a Special Goal Vehicle (SPV) to pool funding from local deepest sector investors and international funds to provide lengthy-length of time financing in infrastructure projects, in accordance to the mandate of the company talked about in all its annual experiences. The experiences additionally talked about that BIFFL is a specialised NBFI with a obvious motive to finance infrastructure projects. BIFFL is the biggest NBFI through approved and paid-up capital.
“The authorities pins high hope on an infrastructure fund by marking an approved capital of Tk 10,000 crore for a company that will trudge the fund. This kind of big approved capital is intended to provide a signal to the local and international investors that the authorities objectives massive for the fund. This would perhaps again develop self belief among the investors,” in accordance to the introduction of BIFFL given in its annual document for 2013.
Financing in brick projects does no longer amble with the motive of the company.
“Furthermore, BIFFL violated finance ministry guidelines for investments. In step with a ministry spherical issued in 2015, authorities, semi-authorities, autonomous, and semi-autonomous institutions can reduction a maximum of 20% of funds dispensed underneath the Annual Construction Programme (ADP) and a maximum of 25% of their very relish funds with deepest banks and NBFIs in 2015-2019 violating the guideline. Besides, it chosen all feeble NBFIs beyond the prescribed relatively correct 13 NBFIs.”
Formanul’s teach: BIFFL does no longer enforce ADP. It has its relish portion capital and could perchance pay dividends to the shareholders. BIFFL did no longer deposit your total quantity in all feeble NBFIs. It invested finest share of it and at that time those weren’t feeble. Please portion the figuring out about the investments made in gargantuan and medium infrastructure projects as smartly. Making deposits is no longer any longer BIFFL’s finest purpose. Making funding in eligible projects is.
Our acknowledge: BIFFL is a authorities-owned specialised finance company, established in 2011 by a name of the Cabinet of the Bangladesh authorities. It is owned by the authorities and represented by the Finance Division, Ministry of Finance, in accordance to the BIFFL web impart online.
So, the above spherical is additionally acceptable to this company.
In the first paragraph of the rejoinder, Formanul claimed that FDR changed into no longer an funding. Alternatively, within the fourth paragraph, he termed FDR as an funding, announcing, “BIFFL did no longer deposit your total quantity in all feeble NBFIs. It invested finest share of it and at that time those weren’t feeble.”
His assertion about FDR’s definition is contradictory.
In our document, we did no longer recount your total FDR changed into in feeble banks and NBFIs. We talked about about 13 corporations that are in actuality unable to pay again.
Furthermore, out of the total FDR, a vital share of Tk200 crore changed into invested in four inclined NBFIs all the diagram through Formanul’s tenure that are linked to Saiful Alam Masud, chairman of the controversial commerce group S Alam and his partner mortgage scammer PK Halder.
As an instance, BIFFL invested Tk56 crore as mounted deposit in Folks’s Leasing and Monetary Products and services in 2017 when feeble financial health of the company changed into already revealed by the Bangladesh Bank.
The central bank eradicated 5 directors of Folks’s Leasing in 2015 for their alleged involvement within the embezzlement of Tk358 crore and the financial health of the NBFI changed into worsening since then.
In 2015, PK Halder’s company Anan Chemical took reduction watch over of Folks’s Leasing.
BIFFL additionally invested Tk138 crore in a single more three NBFIs in 2017 that are linked with Halder and S Alam.
Of the quantity Tk71 crore changed into invested in Global Leasing and Monetary Products and services, Tk52 crore in FAS Finance, and Tk16 crore in Reliance Finance which changed into renamed Aviva Finance owned by S Alam.
All those NBFIs are in actuality unable to pay again cash to BIFFL.
PK Halder took reduction watch over of the four corporations – Global Leasing and Monetary Products and services, Folks’s Leasing and Monetary Products and services, FAS Finance, and Reliance Finance – by purchasing their shares from the stock market all the diagram through 2015-16.
“Your total investments had been made all the diagram in the course of the length of Formanul Islam, then executive director and CEO of BIFFL who changed into forced to resign in July 2019 on the accusation of developing unauthorised FDRs in violation of the ministry spherical.”
Formanul’s teach: Here is additionally a fraudulent allegation. FDRs with Farmers Bank (now Padma Bank) changed into made lengthy before I joined BIFFL on 1 June 2015.
The Board approved the sooner CEO to originate FDRs. All investments as smartly as FDR location had been reviewed periodically by the Audit Committee of the Board and the Board itself. All directors’ experiences had detailed discussions on investments as smartly as FDRs. All those experiences had been signed off by the Chairman of the Audit Committee as smartly as chairman of the Board of Directors.
As smartly as, there changed into a routine interior audit, external audit, administration audit, annual audit, Bangladesh Bank inspection document as smartly as Credit Ranking Reports. Not a single document has ever made any observation on the approval strategy of the FDRs.
Our acknowledge: The BIFFL annual document shows that there changed into no funding in Farmers Bank till 2014. The funding changed into shown within the annual document of 2015 when Formanul changed into CEO. Even when that funding changed into made before Formanul, he did no longer lift corrective measures to receive greater the deposit from a newly introduced bank which changed into already in financial bother since 2017.
Concerning no longer taking funding approval from the board, Formanul admitted in a written assertion to The Industry Identical earlier in our normal document that he took the FDR decision on his relish.
“There changed into no FDR coverage till I obtained approval for one in 2018. Unless then, the CEO had the authority to originate FDRs, and the board-well-liked Treasury Handbook of 2018 additionally approved the CEO to speculate within the cash market as smartly as FDRs,” in accordance to Formanul’s earlier assertion.
Alternatively, within the rejoinder he differs from his assertion.
In 2020, the Anti-Corruption Rate (ACC), filed a case against Formanul and Nisarul on costs of abuse of energy and breach of belief.
In our normal document Formanul claimed, “After my forced resignation on 28 July 2019, BIFFL lodged a complaint with the ACC, accusing me of four offences – one of which alive to unauthorised FDRs in breach of the authorities spherical. The ACC pushed aside all nevertheless the complaint connected to the FDRs.”
“When contacted, SM Anisuzzaman, the executive director and CEO of the company who joined after Formanul’s resignation, on the opposite hand, stated the spherical have to prepare to BIFFL, as it is a long way a fully authorities-owned organisation.
“He stated BIFFL’s capital is supplied by the finance ministry and it differs from a bunch of command banks and NBFIs in that it does no longer bag deposits from the final public.”
Formanul’s teach: Please rely on for on the least one doc that shows that BIFFL is a Jabber-Owned Entity. Please consult BIFFL’s treasury handbook, 2018 which has detailed provisions on receiving and making FDRs. It has by no approach been the arrangement of the authorities to withhold injecting fairness into BIFFL. BIFFL has relatively increased its fairness unhealthy from profits. It has the chance to leverage its fairness on the least ninefold and make contributions extra to the total pattern of the economic system by investing extra in eligible projects/sectors.
Our acknowledge: BIFFL is a authorities-owned specialised finance company, established in 2011 by a name of the Cabinet of the Authorities of Bangladesh. It is owned by the Authorities of Bangladesh and represented by the Finance Division, Ministry of Finance, in accordance to BIFFL’s introduction posted on its web impart online, which clearly says that it is a long way a authorities company.
“Meanwhile, following the toppling of Sheikh Hasina’s authorities, Formanul, who served at BIFFL for over four years since 2015, filed a felony case in September against a lot of high-profile folks, alongside side outmoded finance secretary Abdur Rouf Talukder and Hasina’s deepest industry and funding adviser Salman F Rahman. Additionally named within the case are outmoded NBR chairman and BIFFL board member Abu Hena Rahmatul Muneem, alongside with nine others.
“In the case documents, Formanul claims he confronted harassment and threats after refusing to approve loans for Salman. He alleges that Rouf pressured him for the loans in 2019, and after he declined, he changed into eradicated from his command. The case has now reached courtroom, with the Police Bureau of Investigation ordered to analyze the allegations.”
Formanul’s teach: My case is against forceful resignation and the accused are the Board contributors present in that categorical assembly. It has nothing to attain with the profile of the folks. Since the subject is now sub-judice and the realized courtroom has ordered an inquiry by PBI, it is no longer comely to glorify any accused particular person by a news document and the hidden arrangement is construed to mean unduly affect the strategy of the courtroom.
Please expose that in accordance to the provisions of my Letter of Appointment, there must silent be a query length of 3 (three) months before termination of my contract. Another time, in accordance to the DFMI spherical, approval of Bangladesh Bank will likely be obtained before the resignation of any CEO of any Bank/NBFI and on the least 1 (one) month’s query must silent be served upon Bangladesh Bank in that regard. In my case, even supposing I changed into forced to instruct a “Survey of Resignation”, Mr Abdur Rouf Talukdar well-liked it in the present day and I changed into forced to amble away the place of job premises straight away. My SIM changed into blocked, electronic mail disabled and automobile keys taken away very fleet. I changed into no longer given a possibility to be heard. Nor changed into there any association for designate handover by me. Even my dues much like provident fund and gratuity comprise no longer been paid as yet.
Our acknowledge: Formanul is contradicting his relish assertion. In a single line, he’s claiming about his forceful resignation that “It has nothing to attain with the profile of the folks.” Alternatively, in a single more line, he claims that “In my case, even supposing I changed into forced to instruct a ‘Survey of Resignation’, Mr Abdur Rouf Talukdar well-liked it in the present day and I changed into forced to amble away the place of job premises straight away,” which reflects that he’s categorically blaming Abdur Rouf.
Alternatively, our document changed into basically basically basically based on information and no longer to glorify any particular particular person.
“Abdur Rouf Talukder, who changed into chairman of BIFFL in 2018 whereas serving as finance secretary, raised concerns in 2019 after discovering the unfortunate investments in feeble NBFIs.”
Formanul’s teach: This shows how inept and biased a reporter could perchance additionally be! No rely on changed into requested, on what number of FDRs had been made and what number of projects had been financed all the diagram in the course of the time of Mr Abdur Rouf Talukdar’s becoming a member of as Chairman of the BIFFL Board and till I changed into forced to resign! Please test all Audit Committee Assembly minutes, Board Assembly minutes and Bangladesh Bank Inspection Chronicle all the diagram in the course of the length of 2018-2019. All Audit Reports, Directors’ Reports and Board Minutes had been sooner or later signed by Mr Abdur Rouf Talukdar.
Our acknowledge: In our normal document, we talked about that Formanul changed into pondering about war with Abdur Rouf over FDR placement in feeble banks and non-bank financial institutions. Formanul himself additionally admitted it.
“In conversations with top officers at BIFFL, The Industry Identical earlier has realized that Rouf sought to lift lumber against Formanul, sooner or later pressuring him to resign.”
Formanul’s teach: Here’s a sizable admission by IDCOl administration. My case is all about this. I prefer to encompass you as witnesses to my case.
Our acknowledge: Formanul admits Rouf forced him to resign as the lumber of unauthorised FDR. Alternatively, within the above assertion, he additionally claims that “My case is against forceful resignation and the accused are the Board contributors present in that categorical assembly. It has nothing to attain with the profile of the folks.”
Here is how Formanul gave contradictory statements in his rejoinder.
“An interior audit conducted after the resignation of Formanul stumbled on that deposits had been invested in a joint signature of Nisarul Kabir Siddiqui, then senior critical officer (Treasury) of BIFFL. Later, Nisarul changed into additionally eradicated.”
Formanul’s teach: How come the reporter did no longer rely on about interior audit, external audit, board audit, Bangladesh Bank inspection all the diagram through extra than 4 (four) years of my tenure at BIFFL?
Why changed into irregularity revealed finest after my forceful departure? Any reporter with minimal authentic requirements and ethics would comprise delved into it.
Our acknowledge: Here is no longer any longer share of our document.
“‘When BIFFL novel administration moved to receive greater deposits from the feeble organisations, they got right here to know that those deposits had been given in replace of commission,’ stated SM Anisuzzaman.”
Formanul’s teach: Here is the kind of derogatory, defamatory, libellous and malicious observation intended to destroy my character. If Mr Anisuzzaman has the kind of proof why did no longer he expose those to the Investigating Officer of ACC? I’m questioning why the reporter of a smartly-reputed Every day did no longer rely on for earn proof and relied finest on rumour! This paragraph will likely be straight away eradicated because it is against the code of conduct of the click and journalists.
Our acknowledge: The central bank has additionally confirmed the authenticity of the claims when it comes to commission transactions connected to mounted deposit investments in BIFFL. In a letter to BIFFL dated 16 April 2023, the Bangladesh Bank stated it realized from credible sources that some command-owned banks and NBFIs had been investing in mounted deposits without conducting correct financial analyses or verifying the protection of command funds.
In some circumstances, these investments had been being influenced by folks, in accordance to the central bank.
